Deposit Insurance System not to be Activated in Georgia

January 21, 20151,293 Views

Deposit insurance system cannot be activated in Georgia at this stage. The economic expert Emzar Jgerenaia states. According to him, the insurance system is enacted in all normal countries and the minimum deposits are insured from cataclysms.

The expert notes that the introduction of the deposit insurance system has been discussed for a long time, but to no avail. In his opinion, it will not be carried out this time either.

It was reported a few days ago that the deposit insurance system would be activated in Georgia. According to Economy Minister Giorgi Kvirikashvili, the government started working on the initiative.

In the words of Kvirikashvili, a special working group, headed by the Minister of Finance and co-chaired by Minister of Economic Affairs, will be set up.

Kvirikashvili states that the group also includes George Kadagidze, the President of the NBG, as it cannot be introduced without the involvement of the National Bank.

Vice-premier claims that the World Bank (WB) will help Georgia introduce the system.

The introduction of the deposit insurance system was planned in 2005. The Budget and Finance Committee of Parliament and the National Bank came out with the relevant initiative. The experts of the Germany’s Reconstruction Credit Institute KfWwere involved in the work on the bill.

To give effect to the system, KFW allocated a long-term loan with a low-interest rate to the government, but the project was suspended.

In 2011, Angela Prigozhina, the World Bank’s Private and Financial Sector Coordinator for South Caucasus, claimed that Georgia was the only country that did not have a deposit insurance system.

She said that the deposit insurance system was one of the EU’s directives.